WASHINGTON — The White House announced Thursday that President Barack Obama will sign a trade bill despite it containing a provision that lumps together Israel and “Israeli-controlled territories.”

Such language, meaning that the bill is applicable to Israel and the settlements, “contravenes longstanding U.S. policy towards Israel and the occupied territories, including with regard to Israeli settlement activity,” White House Press Secretary Josh Earnest said in a statement, hours after the measure was approved in the Senate by a vote of 75-20.

Nonetheless, while the president objects to that particular facet of the legislation, Earnest suggested his accepting it, and signing the bill, was part of the nature of bipartisan compromise. “As with any bipartisan compromise legislation, there are provisions in this bill that we do not support,” Earnest said.

The legislation, The Trade Facilitation and Trade Enforcement Act of 2015, is part of a package that was presented to the US Congress last summer. It is designed to strengthen enforcement rules, address currency manipulation and bolster efforts to block evasions of trade laws.

But the bill also includes a clause that addresses politically motivated acts to limit or prohibit economic relations with Israel — targeting corporate entities or state-affiliated financial institutions from engaging in the Boycott, Divestment and Sanctions (BDS) campaign against Israel. This clause earned the commendation of the pro-Israel lobby AIPAC (the American Israel Public Affairs Committee).

“The provision puts the US firmly on record opposing BDS and supporting enhanced commercial ties between the United States and Israel,” AIPAC said in a statement Thursday. “This measure builds on the important work of Congress … passing into law firm anti-BDS negotiating objectives for American trade negotiators.”

Within 180 days after the bill becomes the law, the US administration will be required to report to the Congress on global BDS activities, including the participation of foreign companies in political boycotts of the Jewish State. It also includes a number of legal protections for American companies that operate in Israel.

While the Obama administration has long expressed adamant opposition to BDS tactics targeting Israel, there are several references in the legislation to “Israeli-controlled territories” or “any territory controlled by Israel” as being applicable to the terms of the bill.

View of the Israeli settlement of Maale Adumin, in the West Bank. February 13, 2014. (Miriam Alster/FLASH90)

The conflation of Israel proper with contested territory runs counter to long-standing US policy that settlement activity is an obstacle to achieving a two-state solution, an administration official told The Times of Israel on Thursday. For that reason, the US government abstains from pursuing policies that it sees as conflicting with that objective.

The official stated that the White House seeks to strengthen its economic ties with Israel while at the same time maintaining the policies it considers integral to preserving and advancing the prospect of a two-state accommodation with Palestinians.

Since 1967, the US government has always opposed Israeli settlements and activity associated with them, the official said, also insisting that since the US-Israel Free Trade Agreement was first signed, in 1985, such a balancing act has been a priority of all US administrations, Democrat and Republican alike.

Notwithstanding Obama’s reservations about some of the bill’s language, his signing it is likely to please Prime Minister Benjamin Netanyahu, as the BDS provision explicitly instructs US trade representatives to discourage European Union member countries from engaging in Israel boycott efforts.

In recent months the Israeli premier has clashed with the EU while it has moved to label goods that are produced in territory captured in the 1967 Six Day War as being “made in settlements.”

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